Australia, home of the Falcon, will be down one domestic manufacturer by 2016
05-23-13, 09:41 AM
#1
Lexus Champion
Thread Starter
Australia, home of the Falcon, will be down one domestic manufacturer by 2016
And another one bites the dust. After 90 years of continued operation, Ford Australia will be closing their manufacturing facilities in the continental country by 2016. This means the demise of the Falcon (and its derivatives, like the Ute) and the Territory SUV.
All of this is due to three main factors.
The Australian dollar is incredibly strong compared to other global currencies. This is one of the reasons manufacturing locally in Australia has become an expensive proposition. All three major manufacturers in Australia – Ford, Holden, and Toyota – have incurred massive losses in recent years.
It also doesn’t help that sales of large RWD sedans Ford bets its bread and butter on are also falling out of favour with Australians. These cars – the Falcon and Holden Commodore – have seen declines in sales year after year.
And, to add one last issue to the mix, the ‘One Ford’ strategy is well at work in this situation. It has aimed to eliminate regional models since its inception. The Falcon and Territory, while somewhat popular in Australia, aren’t global vehicles.
Ford will lay off a significant part of their workforce – estimated to be around 1,200 workers – but will retain their R&D and product development facilities in the state of Victoria where Ford is based.
All of this is due to three main factors.
The Australian dollar is incredibly strong compared to other global currencies. This is one of the reasons manufacturing locally in Australia has become an expensive proposition. All three major manufacturers in Australia – Ford, Holden, and Toyota – have incurred massive losses in recent years.
It also doesn’t help that sales of large RWD sedans Ford bets its bread and butter on are also falling out of favour with Australians. These cars – the Falcon and Holden Commodore – have seen declines in sales year after year.
And, to add one last issue to the mix, the ‘One Ford’ strategy is well at work in this situation. It has aimed to eliminate regional models since its inception. The Falcon and Territory, while somewhat popular in Australia, aren’t global vehicles.
Ford will lay off a significant part of their workforce – estimated to be around 1,200 workers – but will retain their R&D and product development facilities in the state of Victoria where Ford is based.
Ford began manufacturing cars in Australia in 1925 with the Model T. In 2016, Ford will stop manufacturing cars Down Under, including the Falcon and the Territory SUV. Ford Australia CEO Bob Graziano has reportedly confirmed the closure of the company's Broadmeadows assembly plant and the Geelong engine plant, both in the state of Victoria. There will be 650 jobs lost at Broadmeadows, 510 sacrificed at Geelong. Of the roughly 3,000 workers the Blue Oval has in Australia, it's said it will try to retain about 1,000 of them at its R&D and product development facilities.
05-23-13, 07:43 PM
#5
Lexus Fanatic
The Australian dollar is incredibly strong compared to other global currencies. This is one of the reasons manufacturing locally in Australia has become an expensive proposition.
Last edited by mmarshall; 05-23-13 at 07:53 PM.
05-24-13, 06:07 AM
#6
Lexus Champion
Thread Starter
High manufacturing costs don't necessarily stifle production. Look at Ford's success, for example, in the 1960s, when U.A.W. wages/benefits at American auto plants, were some of the highest in the world. There is sometimes a difference between conditions that truly overtax a company's finances and when that company is just being plain C-H-E-A-P.
The writing hasn't just been on the wall, it's been a regular item in all the papers and on Ford's bottom line for years. As recently as 2003, Ford sold nearly 75,000 Falcons, but over the next four years, annual sales dropped by something like 10,000 units, and over the last two years, it has sold less than 20,000 per year. It isn't only Ford that has suffered – sales of the other large, locally produced sedan, the Holden Commodore, have also gone over the precipice, triggering the same kind of angst about Holden's continued existence. Ford is the smallest of Australia's local automakers, Holden and Toyota the others, and has posted losses of $AUD141 million last year ($136M US) and $AUD600 million ($580M US) in the past five years. Graziano said the cost of manufacturing is simply too expensive in the country, twice as high as Europe and three times as high as Asia, and there no way to make a business case for staying in the country.
I did not realize that the cost of manufacturing is so high in Australia; it must be the fact that raw materials must be imported from great distances (the continent is too far removed from other, larger continents that supply the materials) and the local market is too small to support these high costs. At the same time, Australia's relative proximity to the world's current low-cost manufacturing centres (China, Thailand, Malaysia in East Asia) makes it cheaper to import entire vehicles than to import raw materials and build locally.
Perhaps there is just too much supply of locally-engineered and locally-built vehicles in Australia, and the death of locally-built Fords will make the market better for GM/Holden. Ford and GM in Australia design and build a niche product -- mass-market RWD cars -- that has little demand in the rest of the world. GM has been lucky that Holden has been able to sell its RWD car expertise to North America but Ford does not seem to have made Ford Australia into a centre-of-excellence for RWD cars.
But as RWD car engineering and assembly is moving to North America for GM's Cadillac and Chevrolet Camaro brands, and Ford's Mustang and (hopefully) Lincoln brands, the imminent death of the Australian niche products -- Falcon and Commodore -- may be coming sooner rather than later.
Trending Topics
05-25-13, 08:22 AM
#8
Holden vows to stay the course in Australia despite Ford exit
Holden vows to stay the course in Australia despite Ford exit
Statement attributable to Holden Chairman and Managing Director, Mike Devereux:
The announcement by Ford today is a reminder of just how tough it is for manufacturers in Australia, even the most committed, like Holden, which is bringing out the most technologically advanced car ever made in Australia.
The new Commodore is a car that is a class above and will change minds. It plays a critical role in Holden's long-term future in Australia and it is expected that Commodore will continue to be one of the top 10 selling cars in the country.
Despite Ford's announcement to end local manufacturing, we believe the industry can survive in Australia and has already adjusted in large part given Ford's relatively low production volumes.
Holden set out a 10-year manufacturing plan that was agreed with the Australian Government in 2012, based on the economic and market conditions at that time. That plan would see Holden invest a billion dollars in this country and secure production of two all-new global vehicles out to 2022.
The industry needs swift action to make Australia's automotive policy settings clear, consistent and globally competitive as quickly as possible.
Holden is working closely with the Australian Government, Federal Coalition and the State Governments to ensure the viability of the industry in the face of the historically significant economic challenges facing the country.
The announcement by Ford today is a reminder of just how tough it is for manufacturers in Australia, even the most committed, like Holden, which is bringing out the most technologically advanced car ever made in Australia.
The new Commodore is a car that is a class above and will change minds. It plays a critical role in Holden's long-term future in Australia and it is expected that Commodore will continue to be one of the top 10 selling cars in the country.
Despite Ford's announcement to end local manufacturing, we believe the industry can survive in Australia and has already adjusted in large part given Ford's relatively low production volumes.
Holden set out a 10-year manufacturing plan that was agreed with the Australian Government in 2012, based on the economic and market conditions at that time. That plan would see Holden invest a billion dollars in this country and secure production of two all-new global vehicles out to 2022.
The industry needs swift action to make Australia's automotive policy settings clear, consistent and globally competitive as quickly as possible.
Holden is working closely with the Australian Government, Federal Coalition and the State Governments to ensure the viability of the industry in the face of the historically significant economic challenges facing the country.
The announcement by Ford today is a reminder of just how tough it is for manufacturers in Australia, even the most committed, like Holden, which is bringing out the most technologically advanced car ever made in Australia.
The new Commodore is a car that is a class above and will change minds. It plays a critical role in Holden's long-term future in Australia and it is expected that Commodore will continue to be one of the top 10 selling cars in the country.
Despite Ford's announcement to end local manufacturing, we believe the industry can survive in Australia and has already adjusted in large part given Ford's relatively low production volumes.
Holden set out a 10-year manufacturing plan that was agreed with the Australian Government in 2012, based on the economic and market conditions at that time. That plan would see Holden invest a billion dollars in this country and secure production of two all-new global vehicles out to 2022.
The industry needs swift action to make Australia's automotive policy settings clear, consistent and globally competitive as quickly as possible.
Holden is working closely with the Australian Government, Federal Coalition and the State Governments to ensure the viability of the industry in the face of the historically significant economic challenges facing the country.
The announcement by Ford today is a reminder of just how tough it is for manufacturers in Australia, even the most committed, like Holden, which is bringing out the most technologically advanced car ever made in Australia.
The new Commodore is a car that is a class above and will change minds. It plays a critical role in Holden's long-term future in Australia and it is expected that Commodore will continue to be one of the top 10 selling cars in the country.
Despite Ford's announcement to end local manufacturing, we believe the industry can survive in Australia and has already adjusted in large part given Ford's relatively low production volumes.
Holden set out a 10-year manufacturing plan that was agreed with the Australian Government in 2012, based on the economic and market conditions at that time. That plan would see Holden invest a billion dollars in this country and secure production of two all-new global vehicles out to 2022.
The industry needs swift action to make Australia's automotive policy settings clear, consistent and globally competitive as quickly as possible.
Holden is working closely with the Australian Government, Federal Coalition and the State Governments to ensure the viability of the industry in the face of the historically significant economic challenges facing the country.
05-25-13, 10:24 AM
#9
main problem with Ford was that their sales in Australia are dropping sharply, and due to high AUD, they cant export the cars profitably, so they cant do anything with their plants.
I believe Toyota is the biggest manufacturer in Australia, both by manufacturing and overall sales, and they said that Aussie manufacturing is safe at least until 2015/2016.
I believe Toyota is the biggest manufacturer in Australia, both by manufacturing and overall sales, and they said that Aussie manufacturing is safe at least until 2015/2016.
05-26-13, 10:34 AM
#10
Lexus Champion
I for one though would love to buy a Chevrolet SS.
Indeed, I would love to have a vehicle that has seen action in V8 Supercars Australia races.
Hope to visit Adelaide soon for that one =)
Indeed, I would love to have a vehicle that has seen action in V8 Supercars Australia races.
Hope to visit Adelaide soon for that one =)
12-11-13, 12:37 AM
#11
oops!!
GM to shut down Australian manufacturing by 2017
Change is in the air at General Motors. With the company's stock price rising to new highs, the US government is divesting itself from the last of its holdings in GM. The auto giant also recently announced a complete restructuring of its European operations, as well as its Chinese operations, and – there was something else – oh yeah, the appointment of the industry's first female chief executive. But for our friends Down Under, the biggest news has just been announced.
Following earlier reports, GM has confirmed that it is shutting down all its Australian manufacturing operations by the end of 2017. The move is expected to cost the Aussies some 2,900 jobs over the next four years as manufacturing comes to an end at Holden plants in Elizabeth and Victoria. GM cites as a principal reason for the move the strength of the Australian dollar, which has risen in value against the US dollar from 50 cents in 2001 to as high as $1.10, making it 65 percent more expensive for an American company to manufacture in Australia than it was a decade ago. The decision follows a similar announcement made by Ford earlier this year.
Although Holden's design studio will remain untouched for the time being, its engineering department is being gutted, leaving the division to focus strictly on sales and parts. Just what that means for the future of the Commodore (Holden's only home-grown product in a portfolio of rebadged Chevys) remains to be seen, as does the fate of the Chevy SS which Holden manufactures for export to the US market.
GM to Transition to a National Sales Company in Australia and New Zealand
Company to cease manufacturing in Australia by 2017
2013-12-10
DETROIT – As part of its ongoing actions to decisively address the performance of its global operations, General Motors today announced it would transition to a national sales company in Australia and New Zealand. The company also said it would discontinue vehicle and engine manufacturing and significantly reduce its engineering operations in Australia by the end of 2017.
"We are completely dedicated to strengthening our global operations while meeting the needs of our customers," said GM Chairman and CEO Dan Akerson. "The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world."
As a result of the company's actions, approximately 2,900 positions will be impacted over the next four years. This will comprise 1,600 from the Elizabeth vehicle manufacturing plant and approximately 1,300 from Holden's Victorian workforce.
Holden will continue to have a significant presence in Australia beyond 2017, comprising a national sales company, a national parts distribution centre and a global design studio.
GM Holden Chairman and Managing Director Mike Devereux said an important priority over the next four years would be to ensure the best possible transition for workers in South Australia and Victoria.
"This has been a difficult decision given Holden's long and proud history of building vehicles in Australia," said Devereux. "We are dedicated to working with our teams, unions and the local communities, along with the federal and state governments, to support our people."
The sale and service of Holden vehicles will be unaffected by this announcement and will continue through the extensive network of Holden dealers across Australia and New Zealand. Warranty terms and spare parts availability will remain unchanged.
"GM remains committed to the automotive industry in Australia and New Zealand. We recognize the need for change and understand the government's point of view. Moving forward, our business model will change significantly however, GM Holden will remain an integral part of its communities and an important employer both directly and through our dealers," Devereux said.
Since 2001, the Australian dollar has risen from US$0.50 to as high as US$1.10 and from as low as 47 to as high as 79 on the Trade Weighted Index. The Australian automotive industry is heavily trade exposed. The appreciation of the currency alone means that at the Australian dollar's peak, making things in Australia was 65 percent more expensive compared to just a decade earlier.
With the decision to discontinue vehicle and engine manufacturing in Australia by the end of 2017, GM expects to record pre-tax charges of $400 million to $600 million in the fourth quarter of 2013. The charges would consist of approximately $300 million to $500 million for non-cash asset impairment charges including property, plant and equipment and approximately $100 million for cash payment of exit-related costs including certain employee severance related costs. Additional charges are expected to be incurred through 2017 for incremental future cash payments of employee severance once negotiations of the amount are completed with the employees' union. The asset impairment charges will be considered special for EBIT-adjusted reporting purposes.
Company to cease manufacturing in Australia by 2017
2013-12-10
DETROIT – As part of its ongoing actions to decisively address the performance of its global operations, General Motors today announced it would transition to a national sales company in Australia and New Zealand. The company also said it would discontinue vehicle and engine manufacturing and significantly reduce its engineering operations in Australia by the end of 2017.
"We are completely dedicated to strengthening our global operations while meeting the needs of our customers," said GM Chairman and CEO Dan Akerson. "The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world."
As a result of the company's actions, approximately 2,900 positions will be impacted over the next four years. This will comprise 1,600 from the Elizabeth vehicle manufacturing plant and approximately 1,300 from Holden's Victorian workforce.
Holden will continue to have a significant presence in Australia beyond 2017, comprising a national sales company, a national parts distribution centre and a global design studio.
GM Holden Chairman and Managing Director Mike Devereux said an important priority over the next four years would be to ensure the best possible transition for workers in South Australia and Victoria.
"This has been a difficult decision given Holden's long and proud history of building vehicles in Australia," said Devereux. "We are dedicated to working with our teams, unions and the local communities, along with the federal and state governments, to support our people."
The sale and service of Holden vehicles will be unaffected by this announcement and will continue through the extensive network of Holden dealers across Australia and New Zealand. Warranty terms and spare parts availability will remain unchanged.
"GM remains committed to the automotive industry in Australia and New Zealand. We recognize the need for change and understand the government's point of view. Moving forward, our business model will change significantly however, GM Holden will remain an integral part of its communities and an important employer both directly and through our dealers," Devereux said.
Since 2001, the Australian dollar has risen from US$0.50 to as high as US$1.10 and from as low as 47 to as high as 79 on the Trade Weighted Index. The Australian automotive industry is heavily trade exposed. The appreciation of the currency alone means that at the Australian dollar's peak, making things in Australia was 65 percent more expensive compared to just a decade earlier.
With the decision to discontinue vehicle and engine manufacturing in Australia by the end of 2017, GM expects to record pre-tax charges of $400 million to $600 million in the fourth quarter of 2013. The charges would consist of approximately $300 million to $500 million for non-cash asset impairment charges including property, plant and equipment and approximately $100 million for cash payment of exit-related costs including certain employee severance related costs. Additional charges are expected to be incurred through 2017 for incremental future cash payments of employee severance once negotiations of the amount are completed with the employees' union. The asset impairment charges will be considered special for EBIT-adjusted reporting purposes.
12-11-13, 05:02 AM
#12
Lexus Test Driver
Join Date: Jul 2013
Location: NSW
Posts: 1,019
Likes: 0
Received 0 Likes
on
0 Posts
It's no secret and this is the inevitable. Toyota is next. As they cannot possibly be the only manufacture making cars here. Very sad indeed that our Automotive industry is officially history. I've always known that GM has wanted to pull the plug, but there has never been a better time than now.
I blame a multitude of factors. But the main culprit would be bad government policies that actually harm the local products l. Take the controversial FTA with Thailand. It has enabled foreign brands to literally dump their products here, while we cannot export to them. One way FTA if you ask me. Then you have the ridiculously low vehicle tariffs which also further hurts the local cars and finally you have the strong AUD which makes imports cheaper (increased profit for mainly Hyundai/Korean & European brands) as they do not pass the savings onto the consumer while making exporting even more difficult and last but not least you have this trend that anything local just isn't 'cool' anymore even though the local vehicles are much better bang for buck.
Unlike the government in USA, here they don't seem to act in the best interest of our local industries. We export our raw materials for $100/tonne and import it for $50,000/tonne
Bad system.
I blame a multitude of factors. But the main culprit would be bad government policies that actually harm the local products l. Take the controversial FTA with Thailand. It has enabled foreign brands to literally dump their products here, while we cannot export to them. One way FTA if you ask me. Then you have the ridiculously low vehicle tariffs which also further hurts the local cars and finally you have the strong AUD which makes imports cheaper (increased profit for mainly Hyundai/Korean & European brands) as they do not pass the savings onto the consumer while making exporting even more difficult and last but not least you have this trend that anything local just isn't 'cool' anymore even though the local vehicles are much better bang for buck.
Unlike the government in USA, here they don't seem to act in the best interest of our local industries. We export our raw materials for $100/tonne and import it for $50,000/tonne
Bad system.
12-24-13, 10:31 AM
#14
Lexus Champion
It's no secret and this is the inevitable. Toyota is next. As they cannot possibly be the only manufacture making cars here. Very sad indeed that our Automotive industry is officially history. I've always known that GM has wanted to pull the plug, but there has never been a better time than now.
I blame a multitude of factors. But the main culprit would be bad government policies that actually harm the local products l. Take the controversial FTA with Thailand. It has enabled foreign brands to literally dump their products here, while we cannot export to them. One way FTA if you ask me. Then you have the ridiculously low vehicle tariffs which also further hurts the local cars and finally you have the strong AUD which makes imports cheaper (increased profit for mainly Hyundai/Korean & European brands) as they do not pass the savings onto the consumer while making exporting even more difficult and last but not least you have this trend that anything local just isn't 'cool' anymore even though the local vehicles are much better bang for buck.
Unlike the government in USA, here they don't seem to act in the best interest of our local industries. We export our raw materials for $100/tonne and import it for $50,000/tonne
Bad system.
I blame a multitude of factors. But the main culprit would be bad government policies that actually harm the local products l. Take the controversial FTA with Thailand. It has enabled foreign brands to literally dump their products here, while we cannot export to them. One way FTA if you ask me. Then you have the ridiculously low vehicle tariffs which also further hurts the local cars and finally you have the strong AUD which makes imports cheaper (increased profit for mainly Hyundai/Korean & European brands) as they do not pass the savings onto the consumer while making exporting even more difficult and last but not least you have this trend that anything local just isn't 'cool' anymore even though the local vehicles are much better bang for buck.
Unlike the government in USA, here they don't seem to act in the best interest of our local industries. We export our raw materials for $100/tonne and import it for $50,000/tonne
Bad system.
"This is going to be a disaster to the Northern Suburbs"
I wonder what Tony Abbott has to say about all this.....
Thread
Thread Starter
Forum
Replies
Last Post
bagwell
Car Chat
40
05-10-16 03:49 PM
